An additional share option (stock option, also known as employee stock option, ESO) that an entity grants upon the exercise by an option holder of previously granted share options using the entity’s shares, rather than cash amounts, to fulfill the payment requirement embodied in the exercise price. Once exercised, a reload option compensates an employee in shares of the entity’s stock, rather than paying the compensation in cash.

The reload option entitles an employee to receive upon exercise, in full, a number of shares of common stock equal to the number of previously owned shares surrendered on exercise of the previously granted options (the original options) or the number of option-bearing shares retained by the issuer in a perfect exercise of the previously granted options.

Effectively, a reload option is an employee stock option that can be traded for more employee stock options.